blinded bulls watch eron movie and wake up, page-4

t/o of qantas... think about it.. private equite plus management borrow all the money to buy themselves a substantial airline... at 25% premium to previously traded price... either the airline was undervalued because management was incompetent at realising value.. or the risk reward calc stacks up in the t/o offer in a way that is not available to the usual investor... in qantas case as far as I know management is reasonably competent... which means that the risk/reward scenario is different for the t/o crew... what makes the difference?

My guess is that the difference is that if you borrow money then its the lenders that assume a big proportion of the risk... deal doesn't work out... t/o crew walk away, banks inherit overvalued airline.. probably sans management at that point... who are the bankers for that deal anyway?

cheers!